Applied Materials forecast fiscal first-quarter revenue of $11.1 billion on Thursday, above the $10.89 billion average analyst estimate reported by Reuters, after demand for semiconductor manufacturing equipment lifted the company’s quarterly sales to a record. The forecast carries a range of $500 million on either side of the midpoint, putting the low end below the estimate and the high end at $11.6 billion.

The Santa Clara, California, company reported $10.41 billion of revenue for the quarter ended Oct. 25, up 53 percent from a year earlier. Adjusted earnings were $4.16 a share, ahead of the $4.06 estimate reported by The Wall Street Journal using FactSet data. The results offer a view of how much chipmakers are spending on the machinery needed to expand production, a different measure from how much they are earning on the chips they sell.

Chipmaking equipment drove the quarter

Semiconductor Systems brought in about $8 billion, up roughly 64 percent from a year earlier, according to the earnings filing and Reuters. That made the equipment segment responsible for more than three quarters of the company’s sales in the period. Applied sells tools used in wafer fabrication, so it can benefit when several chip manufacturers expand capacity, even if they compete for the same customers.

The company said the prior-year comparison uses its current segment presentation, which moved its 200-millimeter equipment business into Semiconductor Systems at the start of fiscal 2026. That detail matters when comparing the division’s growth across releases. The quarterly presentation and the financial statements show the equipment business within the company’s current reporting structure, giving investors a common basis for comparing this quarter with the prior-year period.

Management expects more spending on tools

Chief Executive Gary Dickerson told analysts on the earnings call that he expects another record year in 2027 for both Applied Materials and the market it serves. Reuters reported that Dickerson expects wafer fabrication equipment demand to grow more than 30 percent and that customers are asking to receive tools sooner. Those expectations describe what management sees in the market. The quarterly forecast gives a narrower near-term test of how that demand translates into sales.

Equipment makers sit between plans for more computing capacity and the factories that can produce the chips. When manufacturers expand capacity or adopt a more demanding production process, they have to determine what machinery is needed and when it can be put into service. A request for an earlier delivery can indicate urgency, while the resulting revenue depends on the equipment order and its timing. The company’s quarterly guidance provides a measure against which to assess that conversion.

China’s share fell as sales there grew

China accounted for about a quarter of quarterly revenue, down from 29 percent a year earlier, Reuters reported. Sales in China still increased about 35 percent to $2.64 billion. The two figures are consistent because overall revenue grew faster. Tracking the dollar amount alongside the share of sales is useful here because the share alone could suggest a decline in sales in that market.

The company’s financial presentation breaks out its sales by geography, allowing investors to compare the strength of the latest quarter with earlier periods. The U.S. business also includes a manufacturing relationship with Apple, whose American Manufacturing Program includes work at Applied’s Austin, Texas, facility to support domestic chipmaking equipment production, Reuters reported. The geographic figures describe where revenue was recorded, while projects such as the Austin work concern where equipment can be made.

The company’s earnings release also listed 15 announced partnerships tied to its EPIC research center in Silicon Valley, including four additions. That count describes research relationships. The revenue figures offer a separate measure of current sales, and the company’s quarter-ahead forecast indicates what management expects customers to buy in the near term.

Cash flow and margins give another measure of growth

Applied reported $3.40 a share in quarterly earnings under generally accepted accounting principles, compared with $4.16 on its adjusted measure. The quarterly gross margin was 50.4 percent on the accounting-standard basis and 50.6 percent on the adjusted basis, the filing shows. For the full fiscal year, sales rose 21 percent to $34.45 billion. The fourth quarter’s faster growth lifted that annual result, but its rate should be read against the shorter period it covers.

Operating cash flow reached $3.30 billion in the quarter, according to the company, which reported returning about $2.42 billion through share repurchases and dividends. Those figures help show how the latest sales translated into cash and how management used part of it. The next earnings report will give investors two comparisons: whether sales come in near the $11.1 billion midpoint and whether the equipment segment continues to account for most of the growth. The first measures performance against management’s forecast. The second will help show whether the customers investing in chipmaking capacity are still the main source of the gains.